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Supreme Court Denies Wetlands Permit Taking Petition

Two Washington state solid waste companies lost their bid June 27 to have the U.S.
compensate them for a six-year delay in processing their wetlands permit application
after the U.S. Supreme Court
denied their petition to overturn the dismissal of their takings claim (
Res. Invs., Inc. v. United States, 2016 BL 204470 , U.S., No. 15-802, cert. denied
6/27/16
).

Six years after Resource Investments Inc. and Land Recovery Inc. applied to the U.S.
Army Corps of Engineers for a Section 404 Clean Water Act permit related to their
plans to develop a solid waste landfill in Washington state, the agency denied the
application. They filed an Administrative Procedure Act action in the U.S. District
Court for the Western District of Washington in 1996 and then filed a takings claim
in the Court of Federal Claims in 1998.

Although the U.S. Court of Appeals for the Ninth Circuit eventually ruled for the
companies on appeal, and they opened the landfill in 1999, they maintained that the
agency's extraordinary delay in acting on the permit amounted to a taking of their
property without just compensation in violation of the Fifth Amendment.

While the takings claim was pending in the Court of Federal Claims, the U.S. Supreme
Court issued a significant opinion clarifying the scope of Section 1500 of the little-known
Tucker Act. This provision limits the jurisdiction of the Court of Federal Claims
to certain claims seeking monetary damages against the federal government, such as
takings.

Jurisdictional Statute at Issue

In 2011, the Supreme Court ruled that under Section 1500, a plaintiff who has a claim
pending against the U.S.—such as one seeking equitable relief in federal district
court—can't then seek monetary damages in the Court of Federal Claims if the claims
“are based upon substantially the same operative facts” (
United States v. Tohono O'odham Nation, 563 U.S. 307, 79 U.S.L.W. 4271, 2011 BL 109773 (2011)).

Based on
Tohono, the Court of Federal Claims granted the government's motion to dismiss the companies'
takings claim for lack of subject matter jurisdiction, and the U.S. Court of Appeals
for the Federal Circuit affirmed.

The Supreme Court's order lets stand the Federal Circuit's 2015 ruling that the district
court APA claim and the Court of Federal Claims takings claim “were based on substantially
the same operative facts”—the denial of the Section 404 permit and economic loss attributable
to the denial. Because the two actions relate to the same transaction—the denial of
the permit—Section 1500 bars the later filed Court of Federal Claims case (
Res. Invs., Inc. v. United States, 785 F.3d 660, 80 ERC 1768, 2016 BL 137868 (Fed. Cir.
2015)).

Attorneys: Ruling ‘Deprives'
Constitutional Right

“The Federal Circuit’s decision in this case deprives property owners of their constitutional
right to just compensation,” partner Robert Loeb and associate Marc Shapiro of Orrick,
Herrington & Sutcliffe LLP told Bloomberg BNA in a June 27 e-mail.

Loeb was counsel of record for the companies.

“It is unfortunate the Supreme Court declined to take the opportunity to correct the
court of appeals’ adoption of an erroneous test for jurisdiction under Section 1500—one
that is far broader than that embraced by the Supreme Court—and address the unresolved
question of whether Section 1500 applies to constitutional claims,” they wrote.

Companies: Federal Circuit Ruling Incorrect

In their Dec. 16
petition for writ of certiorari, the companies asked the court whether the Federal Circuit impermissibly broadened
the scope of Section 1500 and deviated from settled precedent when it interpreted
the Supreme Court's straightforward “substantially the same operative facts” standard
to mean “arising out of the same transaction.”

The companies wrote that although APA and takings claims in this case involve an operative
seed fact—the permit—they focus on different issues: the district court case on the
corps' jurisdiction and the Court of Federal Claims case on the economic impact of
the corps' delay. As such, there will rarely be a substantial overlap of the operative
facts for Section 1500 purposes, according to the companies.

They also asked whether Section 1500 should be read to preclude takings claims and,
if so, whether such an interpretation would be unconstitutional.

U.S.: Decision Consistent With Precedent

In its May 16
brief in opposition, the U.S. wrote the court of appeals' ruling “is correct and consistent with” Supreme
Court decisions construing Section 1500.

This case is a poor vehicle for review, because the companies did not properly plead
a temporary takings claim and no longer assert a permanent takings claim, according
to the U.S.

Moreover, the U.S. wrote that the court should deny the companies' constitutional
question because claims arising from “substantially the same facts”
can, if properly pleaded, be litigated in the district court and then the Court of
Federal Claims without causing constitutional issues.

Solicitor General Donald B. Verrilli Jr. was counsel of record for the U.S.

For More Information

The U.S. Supreme Court's denial of the petition for writ of certiorari in Resource Investments, Inc. v. United States is available at
http://src.bna.com/gha.

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